It's been a quiet session for the Australian dollar, and that looks set to continue today


The Australian dollar had a mixed session on Monday, falling against the US dollar and Japanese yen but gaining against the crosses.

Here’s the scoreboard as at 7.45am AEDT.

AUD/USD 0.7805 , -0.0013 , -0.17%
AUD/JPY 88.52 , -0.23 , -0.26%
AUD/CNH 5.1811 , 0.0103 , 0.20%
AUD/EUR 0.6642 , 0.001 , 0.15%
AUD/GBP 0.5912 , -0.0007 , -0.12%
AUD/NZD 1.1203 , 0.0017 , 0.15%
AUD/CAD 0.9872 , 0.0007 , 0.07%

The price action was largely a continuation of Friday’s movements with the US dollar benefitting from speculation over tax reform along with leadership of the US Federal Reserve.

US President Donald Trump said that he’d announce the next Fed chair “very shortly, pretty shortly”.

“The US dollar has been supported following better prospects for tax reform and continued speculation on the next Fed chair being more hawkish,” said Tapas Strickland, economist at the National Australia Bank.

“Who he chooses remains to be seen, but betting markets still place [Jerome] Powell at the top, followed by [John] Taylor and [Janet] Yellen.

“For markets, the key point is that both Taylor and Powell should be seen as more hawkish than Yellen, while Taylor is also seen as more hawkish than Powell,” he says.

AUD/USD Hourly Chart

While that saw the Aussie lose ground against the greenback, seeing the AUD/USD briefly fall below 78 cents, it rose against most major crosses, thanks partially to firmer base metals prices seen during the session.

It also gained modestly against the euro and Canadian dollar ahead of key central bank meetings from the ECB and BoC later in the week.

The New Zealand dollar remained under pressure on the back of continued political uncertainty, something that may be resolved today with the new coalition government expected to release updated policy details following recent negotiations between Labour and New Zealand First.

Turning to the session ahead, it looks set to be another quiet one with few major events scheduled domestically or abroad.

In Australia, the ANZ-Roy Morgan weekly consumer confidence index will be released at 9.30am AEDT while Japan will release its flash manufacturing PMI for October at 11.30am AEDT.

Later in the session, markets will also receive flash manufacturing and services PMI reports from the Eurozone, Germany, France and the United States. The latest Richmond Fed manufacturing index from the US will also be released.

China’s 19th National People’s Congress will also wrap up, although, to date, it has not has any significant reaction on financial markets. Perhaps today will be the day.

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